Good day, and welcome to the Civista Bancshares, Inc. Third Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Dennis Shaffer. Please go ahead..

Good afternoon. This is Dennis Shaffer, President and CEO of Civista Bancshares, and I would like to thank you for joining us for our third quarter 2020 earnings call.

I'm joined today by Rich Dutton, Senior Vice President of the company; and Chief Operating Officer of the Bank; and Chuck Parcher, Senior Vice President of the company and Chief Lending Officer of the bank; and other members of our executive team.

Before we begin, I would like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of Civista Bancshares, Inc. that involves risks and uncertainties.

Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company's SEC filings, which are available on the company's website.

The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute the most directly comparable GAAP measures.

The press release available on our website contains the financial and other quantitative information to be discussed today as well as the reconciliation of the GAAP to non-GAAP measures. We will record this call and make it available on Civista Bancshares website at civb.com. Again, welcome to Civista Bancshares third quarter 2020 earnings call.

I would like to begin by discussing our results, which were issued this morning. At the conclusion of my remarks, we will take any questions that you may have.

This morning, we reported earnings for the third quarter 2020 of $7.7 million, or $0.48 per diluted share and $22 million or $1.36 per diluted share for the nine-months ended September 30, 2020. This represents an increase in net income from 2019 of $136,000 for the quarter and a decrease of $3.5 million for the nine-month period.

The COVID-19 pandemic has had several effects on our balance sheet and income statement during 2020. Our balance sheet has grown as a result of the Paycheck Protection Program, or PPP, the makeup of our income statement has shifted as well.

The largest change on our income statement is an increase in provision for loan losses due to the economic uncertainty created by COVID-19, stay-at-home orders and increased unemployment. Without the increase in provision, our net income would have exceeded 2019 levels for both periods.

Our strong capital position and continued ability to generate core earnings allowed our Board of Directors to once again approve our quarterly dividend of $0.11 per share earlier this month, which represents a dividend payout ratio of 23%.

In addition, after meeting with customers and working through the second round of pandemic related loan modifications during the quarter, we began to gain some clarity of our customers' financial position and their ability to perform moving forward. This clarity along with our strong capital position allowed us to resume share repurchases.

During the quarter, we repurchased 107,500 shares at an average price of $12.15 per share. We view share repurchases as an integral part of our capital management strategy. Our return on average assets was 1.08% for both the quarter and year-to-date, while our return on average equity was 9.01% for the quarter and 8.8% year-to-date.

Despite the lower interest rate environment, net interest income for the quarter was $22 million, which was consistent with the linked quarter and $1.6 million greater than the prior year. Our net interest margin did contract to 3.44% compared to 3.61% for the linked quarter and 3.70% year-to-date.

While the $259 million of PPP loans provided positive net interest income in dollars, they made up 12.7% of our average loans for the quarter and 7.8% year-to-date at an average yield that approximate 3%. They do have a negative impact on our margins.

Without the PPP loans, our margins would improve by 40 basis points to 3.84% for the quarter and by 23 basis points to 3.93% year-to-date. During the quarter, non-interest income was fairly consistent with that of our second quarter at $6.8 million and increased $1.4 million or 25% over the same quarter in the prior year.

During the first nine months, non-interest income increased $3.7 million or 22% over the prior year. The low interest rate environment continues to drive the mortgage markets across our footprint, and mortgage banking continued to be the largest driver of non-interest income.

Third quarter gains on the sale of mortgage loans were $2.4 million, or 6.7% greater than the linked quarter and $1.6 million or 196.1% greater than the third quarter of the previous year. Similarly, the year-to-date gain on sale of mortgage loans was $5.5 million or 223.4% higher than the previous year.

During the quarter, we sold $84.1 million in residential mortgage loans at an average premium of 286 basis points compared to $91.5 million in the linked quarter and $36 million in the prior year. Year-to-date, we have sold $211.1 million in mortgages compared to $80.5 million in the previous year year-to-date.

Our mortgage pipeline remains very strong. Other significant drivers of non-interest income were interchange fees and wealth management fees. Swap fee income was down for the third quarter, but it's 339% higher year-to-date. Service charges have decreased compared to 2019 levels.

We did see some rebound in service charges compared to the linked quarter with an increase of $484,000 or 52%. A $183,000 of the increase was due to reinstating several customer service charges that we suspended during the second quarter to provide relief to our deposit customers. Overdraft fees also increased $270,000 compared to the linked quarter.

While non-interest expense increased both during the quarter and the nine months period compared to 2019, we did see a decrease of 2.1% for the linked quarter.

The year-over-year increase was primarily related to compensation expense, which centered on annual pay increases that go into effect each April, commissions attributable to the increased mortgage loan activity, and overtime associated with commercial loan modifications increased mortgage activity and our participation in the SBA PPP program.

Our efficiency ratio was 60.7% compared to 61.7% for the linked quarter and 61.1% year-to-date. Excluding PPP loans, our loan portfolio increased $16.4 million during the third quarter and $72.9 million year-to-date. That equates to an annualized growth rate of 3.6% for the quarter and 5.7% year-to-date. That growth came in every commercial category.

Our loan pipelines remain strong and we have $124.4 million in approved undrawn construction loans at September 30. In a normal year, we would probably be disappointed with our loan growth. However, considering the effects of the pandemic, we are pleased with the loan production across our footprint.

As the pandemic continues, it is difficult to project how the larger economy and more specifically, our loan portfolio will grow in future quarters. However, we remain optimistic. With respect to PPP, we originated just over 2,300 loans for $259.1 million resulting in deferred fees of $9.9 million.

The SBA recently provided guidelines for abbreviated forgiveness of PPP loans with balances less than $50,000. At September 30, we had 1,368 loans totaling $26.3 million that should qualify for the SBA's abbreviated forgiveness application.

To date we have submitted 23 applications, totaling $8.1 million for forgiveness and have received proceeds from the SBA, paying off four of those loans.

While this remains a more labor intensive effort than we had hoped, we are confident in our approach and are proud of Civista's role in assisting our customers and communities as we continue to navigate this pandemic.

In regards to COVID-19 loan modifications, as the CARES Act was rolled out, we took a very proactive approach to modifications, offering 90-day modifications on over 800, mostly commercial loans, totaling $431.3 million, which represented 26.5% of our commercial loan portfolio at June 30.

Since that time we and our customers have gained a better understanding of the impact of the pandemic on their business. As a result, most have resumed making their contractual payments. At September 30, we had 47 loans, totaling $52.2 million or 2.9% of total loans remaining in deferred status.

The largest concentration of these loans are $21.9 million in hotel, $11 million in healthcare, and $3.3 million in restaurant loans. We continue to experience low charge-off rates and delinquencies remained very, very low.

While we and our customers have a much better understanding of the impact of the pandemic that will have on our businesses than we did coming into the quarter as part of our credit process, we automatically downgraded each of the loans that requested concessions beyond the initial 90-day modifications.

This resulted in an increase in substandard loans of $4.7 million and special mentioned loans of $107.9 million during the quarter. Given the uncertainties associated with the COVID-19 and its impact on the economy, we continue to review and refine the qualitative factors in our allowance for our loan loss model.

As a result, we recorded $2.25 million provision expense for the quarter and $7.9 million provision expense for the year. The ratio of our allowance for loan losses to loans increased to 1.11% from year-end, which was 0.86%. Exclusive of the PPP loans, this ratio would have been 1.27%.

Our allowance for loan losses to non-performing loans also increased to 292.88% at the end of the first quarter from 161.95% at the end of 2019.

While these reflect very strong credit metrics by historical standards, given the uncertain nature of our current economy, we will continue to monitor our portfolio and the economy making further adjustments as our model dictates.

As a reminder, we did meet the guidelines for the delayed implementation of CECL and will not be required to adopt it until 2023. On the funding side, our deposits increased $390 million or 23.2% since the beginning of the year.

While we have seen increases in every deposit category, the most significant increases came in our business checking accounts where the proceeds from the PPP loans were deposited. In addition, over $108.9 million of our year-to-date deposit growth came in personal checking and savings accounts.

The increase in deposits allowed us to reduce our reliance on FHLB advances by $101.5 million or 44.8% since December 31. In addition, we borrowed $183.7 million from the PPP liquidity facility to assist with funding the PPP loans originated during the second quarter.

These borrowings carry a low rate of 35 basis points and also provide for advantageous regulatory capital treatment of the PPP loans. In spite of the challenges of the current environment, we are pleased with another quarter fueled by solid core earnings.

Throughout today's comments, I hope I have conveyed how proud I am of the great team we have here at Civista and the quality customers that have chosen to work with us. We couldn't have one without the other. Our people have accomplished much through the first three quarters of 2020.

Despite the pandemic, we reported earnings per share for the third quarter of 2020, that exceeded earnings in the same period of 2019.

While the next several months will continue to test the banking industry and the larger business world, I am confident that Civista is well-positioned with a solid balance sheet, strong capital levels, and a diverse revenue stream to meet the challenges that lie ahead. Thank you for your attention this afternoon.

And now we will be happy to address any questions that you may have..

We'll now begin the question-and-answer session. [Operator Instructions] Our first question comes from Terry McEvoy from Stephens. Please go ahead..

Hi, good afternoon..

Hi, Terry..

First question I have on the loan modification, the $52 million which are down nicely, are those loans still in round one, or is there a segment that has moved into what I'll call around two?.

The majority of those -- this is Paul Stark. Majority of these -- about $43 million are still in around two. And they're going to run out here in October, about eight of them [technical difficulty]..

And Terry, most of the $259 million in round one were 90-day extension..

Great.

And then as a follow-up question, the 3.84% core net interest margin, what are your thoughts on the fourth quarter and heading into next year, just as you faced this low rate environment and potentially some pressure on your asset yields?.

Terry, this is Rich. And I think, like we said last quarter, most of the compression that we were going to see over the next number of quarters happened during the second quarter, but we will continue to probably battle some contraction. But the way we look at it -- excuse me -- the margin for the second quarter was 3.61%.

And the margin for the third quarter was 3.44%. But if we back out the impact of those PPP loans and the yield that they have, that would have increased the margin of the second quarter by 22 basis points and increased our margin in the third quarter by 40 basis points. I don't put a lot of numbers at you.

But what that equates to is our kind of normalized yield for the second quarter was 3.83%. Our normalized yield for the third quarter was 3.84% actually expanded by a basis point. Maybe kind of surprised us a little bit, but that what we said on the last call was that we expected basis points of compression.

And our loan guys have been doing a great job of just fighting the battle every day and keeping the rates where they are..

Yeah. And then Terry, as rich said, I think we did bear -- running that in the second quarter. Remember the rate reduction was in March. We vary a little bit more and I think as you go forward, that becomes -- that compression at least becomes a little bit narrower.

But we could still see a little bit as we move forward in the fourth quarter, in the first quarter. It is very competitive on the lending side. We have widened spreads and things like that, but it's still competitive and we are trying to protect margin, but we do need to get in, we do want some growth too.

So, we're trying to balance both of those things..

That sounds great. Thanks for taking my questions..

You bet..

Thanks..

Next question comes from Michael Schiavone from KBW. Please go ahead..

Hi, good afternoon..

Hi, Michael..

Can you -- you guys highlighted some markets showing strength.

So, can you just discuss where you see opportunities for loan growth and how the pipelines are looking?.

I can tell you -- Michael, this is Chuck, by the way. I can tell you pipeline into the fourth quarter this year as compared to the fourth quarter last year is $55 million higher. So, we feel good about where we're headed in the fourth quarter.

I think in Dennis's comments he mentioned that we've got about $124 million of unfunded construction to be drawn here over the fourth quarter, first quarter of next year. So, we feel like we're positioned really well. The Metro markets have been very strong.

Columbus, it doesn't seem like it's hardly missed a beat as far as from a development perspective since the COVID took place. We've got some really nice projects in the Cleveland areas, Dayton area, the Cincinnati area. And we've had -- and we have had loan growth in some of our, what I would call, rural areas as well.

So, we're getting contribution from all the regions and feel really good about where we're going in the fourth quarter, barring any really big setbacks from the COVID..

And Michael, I would also say, I think we're doing a really good job of dealing with the right people in the right market. We have a lot of longstanding relationships, our lenders. We, in a lot of our markets, are seasoned veterans -- banking veterans and they've dealt with these people through numerous downturns in the economy.

So, they've dealt with -- some of our guys who've dealt with this some of these guys for 30-plus years. And so, we're doing a very good job. And even though we have exited -- or high risk industries like hotels right now and healthcare facilities and restaurants, those are just -- those are industry types that we're not lending to.

We still think we'll get some good loan growth because of these longstanding relationships that many of our lenders have with some of these customers within our footprint..

And quite frankly, Michael, the other thing that we've got a little bit of advantage of right now is with the CMBS market slowing down, some of our larger projects that we would have thought that would have went to the permanent market by now have stuck on the balance sheet, that has helped from a balance perspective as well..

Okay. Thanks for that color. And on fee income, year-over-year growth has been quite strong.

Can you just talk about how sustainable the fee income run rate is?.

Well, I think, for the near term and at least the early part of next year, the mortgage banking piece is going to stay relatively strong. Those pipelines are pretty full. We've had pretty good swap income for the year, up substantially. We've widened spreads there and that slowed that activity a little bit down in the third quarter.

But if the CMBS markets are not active, I do think that we can continue to do some good volume on the swap income side. And some of our service charge income it was down in the second quarter because we had kind of suspended some of that, that's back.

And I think interchange activity may be up some just because people are using their debit cards and things like that more. So, I think it's sustainable. We've really had a focused effort on trying to increase that non-interest income over the last three or four years. And we really built that up nicely.

And we're going to continue to invest in those areas so that we can continue to kind of diversify our revenue stream..

Okay. And just one last one. Many of your peers have announced plans for a branch or office cost savings plan.

Has the Board reviewed anything like that within the footprint to consider a similar cost initiative?.

Yeah. I think we're really taking a hard look on the expense side going into next year, obviously because in this lower for longer interest rate environment, we need to look for and make sure we're operating as efficiently as we can. So, we have talked about a number of things. As far as expenses, we do continue to take a hard look at them.

And I believe that there are some expense reductions that we can realize. For us though some of that expense savings will be reinvested back into the company mostly in the form of technology upgrades.

We recently entered into a contract upgrade our digital banking platform and that's a platform that will enhance our digital offerings for both our commercial and our retail customers. So, I do think that we're going to see -- continue to get some expense reductions, but for us, part of that at least will be reinvested back into the company. .

Okay. Great. Thanks for taking my questions. Have a good weekend..

Okay. Thank you..

Our next question comes from Nick Cucharale from Piper Sandler. Please go ahead..

Good afternoon, guys.

How are you?.

Hey, Nick..

Hi, Nick..

Just to piggyback off the loan commentary, can you give us a sense for the competitive dynamics in your market? Has the competition increased with the modifications coming down across the industry?.

It has increased. This is Chuck again, Nick. Definitely the rates of increase that I will tell you, we've probably walked away from a lot more deals than we have in past years, that offends. We're really, really trying to hold margin as much as possible.

And when we get down to certain rates on certain transactions, especially if we can't get any other ancillary income or fee income from those transactions, now we're letting more walks than we ever have. Like I said before though, we feel good about, where the pipeline sits that right now.

And feel like fourth quarter -- we feel good about projecting out past, that's going to be difficult until we see how this COVID plays out from a growth perspective, but I do feel good. We've looking into the fourth quarter..

And Nick, just as -- I've mentioned that we've exited some of those high risk industries, most of our competition has too. So, I think we're all fighting for a smaller bucket there of deals too. So, I think that it only intensifies the competition..

And from a marketplace perspective, I would tell you, Columbus seems to be the most competitive right now. We've had a lot of different competitors move into that marketplace over the last three to four years. I think people are still trying to inch out some loan growth to make those investments pay off.

So, we're seeing a really, really competitive rate environment down there. And then, we're also seeing often the Metro market, but that seems to be the one market where it seems very frothy from a rate perspective..

Okay. And then just to follow-up on the improvement in deferrals.

It was helpful that you broke out the loan types in the release, but were any of the remaining modifications disproportionately represented in the especially effected industries you've run through in the past? Or are they pretty dispersed?.

This is Paul. It’s pretty dispersed. Obviously, we talked about hotels. It was probably the biggest portion of it. And then it's pretty distributed there a couple of restaurants. But [technical difficulty], but it’s significantly lower than it was the first round and a lot of that going on..

Yeah. Nice job there. It looks like the expenses came in a little bit better than expected.

Rich, can you share with us your outlook on the expense front in the near term?.

I mean, I guess, there are things going up and things going down, Nick. I mean, the COVID expenses are a big piece, although I think they did kind of curtail during the quarter. I think Nick, you were right at about a $100,000 of COVID-related expenses, but certainly the travel and education and some of those expenses are down too.

I think if you were looking for a run rate going forward and I'd hate to project much past the end of the year, but I think what we did in the third quarter as a decent proxy for what we'll do in the fourth quarter..

Okay. That's helpful. And then just lastly with your total capital ratio at nearly 16%, you continue to have strong internal capital generation despite the reserve built.

Can you help us think about your capital priorities and your thoughts on continuing to utilize the buyback?.

Yeah. I think, we think that's a great way to deploy it right now, particularly when we're trading under book value. And any of those shares are highly -- that we're buying back, are highly accretive as well. So, we think that given our comfort level right now with our loan portfolio that activity most likely will continue.

So, we feel very comfortable there. And it's probably the best way. There's not a whole lot of M&A activity happening at this point. So, it's probably the best way for us to deploy capital..

Great. Thank you for taking the questions..

Thank you..

Our next question comes from Russell Gunther with D.A. Davidson. Please go ahead..

Going back to the NIM..

Start again..

Going back to the NIM discussion on the funding cost side, I was wondering if there were any levers to bring that down further, or it will be difficult to bring it down below to 50 to 60 basis point range?.

Hey, Russell. This is Rich. And we say every quarter that it's going to be hard to do it. And it seems like every quarter we squeeze out another basis point or two, but the really only significant lever we've got left to pull is on the CD, the time deposit side. We don't have a ton of time deposit.

But certainly, those are things that we've repriced late, maybe in the third quarter. So, we might see a little bit there. But to your point, it's going to be hard to reduce funding near-term cost..

Okay.

And then on the investment security side, do you anticipate the yield on those remaining relatively stable going forward, or any type of lag compression there?.

I think again, what we saw earlier in the year is probably what we're going to see. I mean, we've got it fairly well laddered out and not a whole lot roll it on and off. We probably moved maybe more in a taxable munis than non-taxable munis, but the yields have kind of held there.

So, again, I don't think we're going to see much compression due to reducing the yield on our investment portfolio, again near term in the next several quarters..

Got it. And then just one last question on the deferrals. I was just wondering if you're able to share an updated trajectory down into the fourth quarter from the 3% today..

Well -- yeah, it's really hard to -- this is Paul Stark. It’s hard to say. There's no question we've seen the migration of credits return -- getting stabilized and returning back to payments. Over time here when we get into the winter, especially some of the seasonal businesses, I think we're going to see some additional changes.

But I don’t think we're going to see a huge increase. We've been very fortunate in our portfolio as mentioned that the strength of our borrowers. And to be honest with you, we've not seen any defaults or any bankruptcies yet in our book. Our consumer portfolio has been – it's very good. I mean, we have only about five deferrals in that whole book.

So, knock on wood, we'll continue to be fortunate and keep work at it, but I don't think we're going to see a huge spike or anything like that..

Yeah. And Russell, the wild card is the stimulus. Is there another round of stimulus coming and they've been targeting some of these higher risk industries and stuff. So, if that comes, maybe there's a chance that those numbers come down a little bit more.

If it doesn't come, that's the uncertainty out there today that this whole pandemic has brought us. So, it's just hard to predict, but we're really pleased bringing it down from the -- from where our first round level was. And again, we thought we were fairly aggressive.

Anybody that did say they were affected, we really granted them that first 90-day extension, because that was the same time the PPP was hitting. So, we're pleased with where we stand as far as deferrals today. .

Got it. Thank you for taking my questions..

Thank you..

Thank you..

Our next question comes from Joe Plevelich with Boenning & Scattergood. Please go ahead..

Good afternoon..

Hi, Joe..

Hey guys. Just a quick question. You talked about how you did kind of like automatic downgrades for anything that was -- more than a 90-day modification.

Can you walk me through some of those numbers again? And what if any kind of incremental downgrades we might see here over the next couple of quarters?.

Well, Dennis mentioned, we did the first deferral without doing a lot of analysis. Second round we get a lot of information because historical information wasn't not really pertinent given that the shutdowns.

And as we looked at these, if they needed a second deferral and that said reduced significantly, I think we did 723 the first round down to, I think, just over 100, the second round. And based on that, we would suggest that downgrade it -- if their projections on cash flow that returning back on the right trajectory, then we would downgrade it again.

So, we're getting back towards our -- and really integrating them with normal risk rating process. So -- and I think they think we're going to continue to see changes and we're monitoring this thing as close as we can on a credit by credit basis.

So, right now, as we said earlier, I'm not really sure where it's going to go, but it seems like the group needs to pay attention to it gets smaller as we go..

Yeah. And Joe, I would not say -- at this point we feel pretty confident. There's no risk of loss right now from where we stand. We -- Paul has been using the term in some of our management meeting there's more risk of default and risk of loss. We feel that we're fairly well secured with the -- with a lot of those loans.

We've got good sponsors behind them. They are clearly COVID and pandemic affected. And so, right now, we really feel that the -- we felt it was appropriate because obviously there's more risk today during this pandemic than we had six months ago or 12 months ago, certainly a year ago.

So, we feel it's appropriate to graded appropriately downgrade it, recognize it, keep it, keep a close eye on it. But again, I think from our standpoint, right now, there's more risk of default and risk of loss..

Thanks.

And then, do you have a specific number of criticized and classified? Is it 9/30 versus 6/30?.

Yeah. We did. I think Dennis's comments, special mention really is what most of the increase was.

We were at about -- 6/30, which was prior to the second deferral round where we gathered information was about $15 million and it's up to $117 million as of 9/30 and virtually all of those were those that -- where we gathered new information and [technical difficulty] loss given default in our view is very [technical difficulty]..

This is Rich. Most of those were -- or maybe all of those were the automatic downgrades. I mean, those are all -- we're talking special mentions there. If you're going to be a criticized asset, those are the best kind of criticize assets..

Thanks, guys..

[Operator Instructions] Our next question comes from Kevin Swanson with Hovde Group. Please go ahead..

Good afternoon..

Hi, Kevin..

Hi, Kevin..

I'm sorry to keep going to these deferral numbers, but I was just curious for your perspective on LTVs, assuming that the originated -- the values are at the origination date, could you comment on what the impact of cash flow disruption has done to some of the valuations and particularly in the hotel portfolio? Or maybe just anything you're seeing in the marketplace, so it would maybe update the value of those properties?.

This is Paul. Obviously, if you have a disruption income for a long period, it's going to affect your value. Right now, I think most of the appraisers are looking at things as a temporary disruption. But really, we're not seeing a huge fall off in values. And at least -- that's based on the values we've gotten in the last six months.

So, I'm sure that over time that may change. We're not ordering new appraisals yet. So, that's kind of hard to gauge. For the most part our hotel book is at is fairly low. I don't have in front of me, but I want to say 58%....

53%. I think -- little low, okay..

[Technical difficulty] That's where I think we stand right now. So, I think we're a pretty good shape. The other bucket of loans that stress early on was a retail related -- commercial real estate properties.

A number of the tenants had asked for deferral, but most of those are returning to payment structures and most of those gone back to the full payments -- tenants are now paying..

And Kevin, I would say on new deals at least that we're putting on the books, appraisals are coming in pretty much -- I think the values are being -- they're holding. So, we're not seeing like the last recession where going into that, we saw big drops in real estate values. We haven't seen that on the new deals going on the book.

And we haven't seen that, but we've got good customers, commercial customers sell properties, and they've gotten kind of the price they wanted to get. So, we haven't seen that big drop like we did during the last recession. And then the other big difference obviously is the housing market. Those real estate values are really strong.

And during that last recession, they went into tanks. So, to me that's one of the biggest differences between this pandemic induce -- this COVID induced recession and the last recession. .

This is Chuck. We're watching those cap rates pretty close as those are coming in, and cap rates have really not moved much whatsoever. In fact, in a few things, I think [technical difficulty], because of the drop in interest rates over the last six months.

So, values are holding and the PPP program really helped I think that the retail investment guy -- like Paul mentioned earlier, we had some tenants who came in and we were asked forbearance on the rent to some of our landlords and our borrowers and once the PPP funded and those values could be -- they could use that for rent.

That helps, that went a long way too. And we have very few property owners right now that have people on deferral as far as from rent perspective..

Okay. Thanks. That's all really helpful. And then just finally for me.

Could you maybe update us on in terms of PPP and new clients gained through that, any kind of traction you've had on that end?.

Well, we've got -- we're tracking that a couple of other places, but we've got a little over 300 new opportunities via the PPP program. I don't have a specific dollar amount in front of me. Right now, we're still working through that. But I can tell you it's been significant, especially on the deposit side.

Obviously, we are just little slower to move more from a lending perspective, but we feel really good about the new opportunity that we've got and then almost all of the opportunities will come from the major regionals or the national banks and looking to get back into community banking..

Anything else, Kevin?.

No. That's it. Thanks..

Thank you..

Thank you, Kevin. .

This concludes our question-and-answer session. I would like to turn the conference back over to Dennis Shaffer for any closing remarks..

Thank you. In closing, I just want to thank everyone for listening and thank those that participated in the call. Again, we are extremely pleased given this pandemic with our third quarter results. The balance of 2020 will continue to be a challenge.

But we look forward to meeting that challenge and to talking to you again in a few months to share our year-end results. So, thank you for your time today..

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect..